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Apprenticeship Levy: It’s coming in April 2017. Are you ready?

By August 18, 2016January 26th, 2021Member News & Updates

The latest proposals on the Apprenticeship Levy were published on the 12th August by the Department for Education.  There is no sign that the Government is going to delay this major new tax despite fierce industry lobbying.  The proposal also clarifies how apprenticeship funding will work for non-levy paying employers.

In case you have missed it the Apprenticeship Levy will create a new tax of 0.5% on employers with annual pay bills of over £3m.

The proposals issued in August 2016 give more details on how the Levy will work and how employers can get value out of it.  The Levy comes at a time of other huge changes in Apprenticeships, including the introduction of Digital Accounts for employers and establishment of Trailblazer Apprenticeship Standards.  All of these changes create new challenges.

However there is good news as well.  The apprenticeship reforms provide great opportunities for businesses to upskill their existing workforce, access new talent, reduce costs, solve recruitment issues and increase productivity.

Some highlights from the published proposals are:

  • Non-Levy Paying Employers will co-fund apprenticeship training, with the Government contributing 90% of training costs and the employer making a contribution of 10%.
  • The Government will fund 100% of the cost of training 16-18 year old apprentices for small businesses (fewer than 50 staff).
  • Government contribution of 90% of apprenticeship training costs for Levy Payers who use up their Levy contribution.
  • Changes to the funding levels for existing apprenticeship programmes.
  • A new register of Apprenticeship Training Providers to be established.
  • Requirement for employers to negotiate cost of apprenticeship training.
  • Use of apprenticeship funding to include the opportunity to upskill employees ‘to undertake an apprenticeship at the same or lower level than a qualification they already hold, if the apprenticeship will allow the individual to acquire substantive new skills and the content of the training is materially different from any prior training or a previous apprenticeship’

Consultation is ongoing and final rules are due to be published in October 2016.

Deadlines are tight and for many employers this is unchartered territory.  JRV Associates offer  independent expert advice to employers seeking clarity on what these proposals and the apprenticeship reforms mean for their business.  Please contact Jenny Vince at [email protected] to arrange an initial conversation.